A new Massachusetts law aims to bring back the starter home. Here’s what that means.
By Zane Razzaq, Cape Cod Times
During a session at this year’s Housing to Protect Cape Cod summit, lawyer Robert Brennan asked the crowd at the Emerald Resort whether they had seen a new starter home go into production in their neighborhood in the past year.
A smattering of hands went up. More hands rose when he then asked if they’d like to see more.
Starter homes are now scarce in Massachusetts, but a new law – Chapter 40Y, officially the Starter Homes Zoning Districts Act – aims to kickstart production, said Brennan, chief legal officer for Housing Assistance Corporation.
“That’s been lost in Massachusetts and it’s been lost here on Cape Cod as well. It’s existed, but it’s been gone … the need has existed, it continues to exist,” he said. “The initiative is to bring back the starter home.”
The initiative started in 2004 with Chapter 40R. It’s been reestablished as part of the economic development bond bill in 2022.
As state regulations are expected to come out by the end of this year, no towns or cities in Massachusetts have formally adopted a Starter Homes Zoning District yet, said a spokesperson for Executive Office of Housing and Livable Communities.
The law was spotlighted during the Oct. 30 summit where more than 300 people gathered to discuss housing topics. Housing to Protect Cape Cod was formed in 2022 and comprises the Cape Cod Chamber of Commerce, Home Builders & Remodelers Association of Cape Cod, and Housing Assistance Corporation.
What is considered a starter home under Chapter 40Y?
The law allows towns to establish by a simple majority vote an overlay district where starter homes — a single-family home not greater than 1,850 square feet — can be built by-right, meaning the projects would not require special permits or other discretionary approvals.
Falmouth Housing Trust’s Executive Director Laura Moynihan said she sees this as a main benefit.
“The by-right development means that you simply apply for a building permit and you could have a home built in maybe eight months. Right now what we’re facing in Falmouth to build five homes on one acre – it’s taken two and a half years into the project,” said Moynihan. “The permitting alone was one year.”
Key requirements of the program include at least four units per acre as-of-right, at least 50% must have three or more bedrooms, and starter homes cannot be age-restricted.
Ten percent of the units have to be affordable to up to 110% of the Area Median Income.
Housing is one of the most pressing challenges for Orleans as it looks to stabilize itself as a year-round community, said Elizabeth Jenkins, assistant director of planning and community development for Orleans. The town last year had a median home sale price of $1.2 million for a single-family home and has seen a drop in its school districts and population of those under 35, as businesses struggle to find staff.
“And we all know that the number one reason behind that is the lack of housing options available and the unattainability of our current housing stock from a financial perspective,” said Jenkins. “40Y tries to address that by encouraging that small-scale type of development … it’s trying to fill a gap in the housing market that is just not being produced.”
More starter homes could also help older people looking to downsize and stay on Cape Cod in turn freeing up larger homes, said Moynihan.
“If older people want to sell their larger home that they maybe don’t need anymore, there’s nowhere for them to go because of the high cost of housing,” said Moynihan.
What’s the benefit of a Starter Home Zoning District?
Communities would receive from the state a one-time zoning incentive payment from $10,000 to $500,000 after adopting a Starter Home Zoning District. That would be followed by a second payment of $3,000 for each new housing unit built.
If a town wanted to establish a Starter Home Zoning District, first steps would include identifying appropriate areas of town and developing a starter home bylaw for state approval and adoption by town council or town meeting.
Moynihan noted: “Housing development and water resource protection really need to go hand in hand.”
“The starter home bylaws for increased density on parcels, it really depends on the town’s infrastructure to support it. If a town has infrastructure that can support it, such as a sewer system with capacity for the starter home district, water infrastructure, road infrastructure, then that town might be successful with employing a starter home district than another town,” said Moynihan.
HAC lawyer Brennan noted that land can sometimes be the most expensive part of construction.
“When your only choice is to take one acre of land and use it to support one home, what ends up happening is you build a larger home to absorb the cost of that land. 40Y starts with the premise that the cost of the acre is going to be spread out across at least four units and that is a big lever to bring down cost,” said Brennan.
Jenkins said the kind of small-scale housing pursued with the Chapter 40Y Program are generally widely accepted in communities.
“This sort of traditional smaller-scale cottage type of development fits very well with our traditional New England development patterns,” said Jenkins.
Zane Razzaq writes about housing and real estate. Reach her at zrazzaq@capecodonline.com. Follow her on X @zanerazz.
